If you want to claim your ERC tax credits, you might first think of going to your CPA for help. However, that might not be the best idea.
While CPAs are incredibly talented people who provide crucial financial services for businesses, we'll go over several reasons why you probably shouldn't use them to claim your ERC refund.
Reason #1: They aren't specialists
Look, CPAs wear a lot of hats, and they're usually pretty good at it. But the ERC tax refund program falls under one of the areas that isn't usually their strong suit.
That's because the ERC is a payroll tax credit, not an income tax credit, which is what CPAs are usually more familiar with. One of the reasons for this lack of familiarity is that a lot of companies tend to hire out their payroll to third-party services.
So, through no fault of their own, most CPAs just don't do a lot of payroll stuff a lot of the time.
Instead, they tend to focus more on income taxes for their clients, preparing financial documents, or helping with financial planning. These are incredibly important services for a business!
But here's the truth: the ERC program just doesn't really fall into their wheelhouse.
And, since there's potentially a lot of money on the line—we're talking hundreds of thousands, or even millions of dollars—it just makes more sense to hire someone who really knows the rules and regulations inside and out.
Reason #2: ERC credits are really, really complex
This point goes hand in hand with the first one, but it deserves further elaboration. Basically, those rules and regulations we mentioned? Well, there are over 200 new pages of tax code that lay them out.
Not only is that a lot of new code to filter through, but it's also pretty complicated and it took the IRS a while to release clear guidance on how to interpret it. At the start of the ERC program, it was really difficult to determine which businesses could qualify and how they could claim the credits.
Then, to take things one confusing step further, the ERC program has been amended several times.
As a quick overview of these changes, at first businesses could only claim either the PPP loan or the ERC refund. But 9 months later, the rules changed to allow businesses to claim both.
Initially, ERC refunds were only available for 2020. However, eventually new legislation expanded the program into the first two quarters of 2021. Then another piece of legislation expanded it even further to the third and fourth quarters of 2021, before being backtracked by yet another law passed by Congress that eliminated the possibility of an ERC refund for Q4 of 2021.
The laws would say one thing one month and then the complete opposite another. To put it rather bluntly, ERC credits were kind of a mess for a long time, and it was a lot to follow. Understandably, most CPAs just didn't have the bandwidth to keep up with all the changes and backtracking.
However, that means that today, many CPAs are still really unfamiliar with the ERC program. They simply don't know all the rules, which means you could miss out on some of the cash you could receive if they were to help you file your claim. Which brings me to my next point...
Reason #3: ERC experts are better at getting you more money
Not only are the rules for ERC refunds complex, but the actual calculations used to apply the rules are also complicated.
A lot of times, CPAs aren't even sure how to do the calculations, and many of them worry that they won't do them accurately, which could risk your business getting audited by the IRS. And nobody wants that!
It also leads to the question of if they aren't comfortable with the calculations, then how will they be able to MAXIMIZE them so you can claim the most money possible?
Again, we have nothing against CPAs. They're an incredible asset for any business! But because they don't know the ERC program as well, they often don't get you as much ERC money as they could, plain and simple.
In fact, it's even been found that, on average, hiring an ERC expert can help you claim anywhere from 10-20% more than a CPA! And because the amounts are potentially so high, that could be a difference of multiple thousands of dollars.
Your team of ERC experts
Now that we've hopefully convinced you of the benefits for using ERC experts, instead of your CPA, to make your claim, we hope you'll give our team a call!
Since many CPAs don't even want to deal with ERC stuff, we're pretty sure yours will thank you for not getting them involved. Your CPA is busy with lots of other important things . . . so let us be the ones to help.
After all, making and maximizing ERC claims is what we specialize in, so we'll be with you through every step of the process, from the initial consultation through the day you get your check in hand.